Superseding Indictment Charges Two Defendants with Allegedly Participating in a $6.5 Million Scheme to Defraud Start-Up Companies
21 December 2011 – Preet Bharara, the United States Attorney for the Southern District of New York, and Victor W. Lessoff, the Special Agent-in-Charge of the Newark Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the arrest of DAVID LEVY for allegedly participating with his wife DONNA LEVY in a $6.5 million “pump and dump” scheme to defraud start-up companies. DONNA LEVY was previously charged in the Southern District of New York, along with 10 others, for engaging in a market manipulation-for-hire scheme. A Superseding Indictment unsealed today includes new charges against DONNA LEVY and adds her husband DAVID as a defendant. The Superseding Indictment also adds new details to charges against THOMAS PREZIOSO concerning the previously-charged manipulation-for-hire scheme. DAVID LEVY surrendered to authorities in Fort Lauderdale, Florida, earlier today and will be arraigned before United States District Judge Paul A. Crotty at a later date.
Today’s charges are the result of an ongoing investigation by the Government into so-called “pump and dump” stock fraud schemes that employ the Internet and social networking sites, among other tools, to manipulate the price of penny stocks. In October 2010, 11 individuals were charged with participating in the manipulation-for-hire scheme. Eight defendants have already pled guilty for their roles in the scheme, including four defendants – RICARDO FERNANDEZ, WILLIAM MACKEY, BRADLEY SUSSER, and STINSON BLAND – who pled guilty this week.